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I will start with integration joint boards, which have been a favourite source of conversation in the committee in the past.

Paragraph 22 of your report highlights:

“Financial transfers are made routinely, from the Scottish Government’s health and social care portfolio budget to the local government portfolio budget. For 2023-24, these amounted to nearly £1 billion ... This increased from £878 million in 2022/23. NHS boards allocate a significant portion of their budgets to integration authorities”,

and I believe that the figure is about £7.6 billion.

The report also says:

“During the Covid-19 pandemic, IJBs built up significant reserves of about £0.3 billion, which were used largely in 2022/23.”

Therefore, the financial position of IJBs is having a significant

“impact on the financial position of NHS boards, with a number of boards required to fund IJB overspending.”

I know that, in my own area, the provision of health and social care is running way over budget—by multiples.

To come to my question, the report states that financial transfers of around £1 billion were made from the Government’s health and social care portfolio to local government and that an allocation of £7.6 billion was made to integration authorities by NHS boards. What is your assessment of the financial strain on NHS boards caused by the overspending of IJBs, and what needs to change to improve the financial management and accountability of IJBs?

Doing any planning beyond the current year would surely just open up the Scottish Government to all sorts of variables that come from the UK Government, meaning that it would be chopping and changing its budget all the time. The changes that have come out of Westminster have been fairly frequent and fairly sweeping. If the Scottish Government does its projections, hopefully into the medium term, it is just a nonsense.

Perhaps we can move on a little bit. In paragraphs 28 and 29 on page 13, you say:

“During the process of developing the 2024/25 Scottish Budget, no portfolio accountable officer was able to provide assurance that they would be able to fund their existing commitments with the initial allocations provided to them.”

Subsequently, they were

“able to provide these assurances as funding was finalised, and after identifying savings and reprioritising spending”

and so forth. What does that mean? What is your assessment of the impact on public services of this prolonged funding uncertainty and in-year budget changes?

Unsurprisingly, I will talk more about the budget. Paragraph 24 on page 12 highlights the timing of the UK budgetary information as one of the pressures that the Scottish Government has to deal with. Your report states:

“The funding that the Scottish Government receives from the UK Government is not finalised until near the end of the financial year once the UK Supplementary Estimates are known, usually in February”,

which, given the timing, is difficult for the Scottish Government and means that it has to manage potential impacts of changes to its funding, even at the last minute, throughout the entirety of the financial year.

The latest UK Government spending review was in 2021, which means that, after 2025-26, it is not clear what funding the Scottish Government will receive, and that obviously impacts on its ability to plan its budgets. We are urging it to plan its budgets several years in advance, but that situation virtually prevents it from doing so.

How does the timing of the UK budget and the spending review impact on the Scottish Government’s ability to plan its budgets? What steps could it take within the powers that are available to it to mitigate that particular pressure?

Just before paragraph 32 of your report, you state:

“The Scottish Government regularly makes large in-year changes to its budget to break even”.

You are making similar points to those made by the Finance and Public Administration Committee, which published a report on 7 November this year, stating:

“There is little evidence that medium- and long-term financial planning is taking place, and year-on-year budgeting has also become challenging, with significant emergency controls being required in each of the last three years.”

Are emergency controls becoming the new normal? Has that now been adopted as the way forward? How sustainable is the regular use of in-year changes to address budgetary pressures, and what are the risks?

Can I ask a daft-laddie question? You talk about the Scottish Government not understanding its cost base. We know what we spend the money on. What exactly do you mean when you say that it does not understand the cost base?

You would hope that the people running these areas would have a good knowledge of their cost base when the pressure comes to save money and so on. I think that the Scottish Government itself operates at that higher level; the people in the trenches who deliver the services should be able to make those assessments.

Certainly, I would agree that it is quite startling that it was right across the board—from what you are saying, it was every accountable officer. In your report, you note that

“Financial pressures are already impacting on the quality or level of services and affecting the long-term objectives of the Scottish Government.”

You highlight that

“The long-term impact of ... reductions in spending has not been consistently and publicly set out. This restricts the Scottish Parliament’s ability to understand and ... scrutinise the budget”.

In paragraph 31, on page 13, you further state that

“It is not clear how activity to reform services, and the savings and costs involved, is taken into account when making decisions on the budget.”

What types of information did you expect to see in the budget yesterday? Was that information missing? How should that information be properly set out?

I realise, Auditor General, that you have not had a chance to scrutinise the budget in detail yet.

Lack of information seems to be a common theme right through the whole budget process. We are not seeing the workings—how the answers are arrived at in terms of budget allocations and so on. How should it be set out? We know from what you are saying that there is information missing. Can you tell us how you would expect that to be set out in a budget—without referring to yesterday?

Start with the regional aspect.